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A car loan is neither too easy nor too tough to get. If you are planning to take a car loan, then the best thing to do is to get the copy of your credit report 6 months before you are going to apply for the loan. If you do so, you will have ample time to understand what improvements you need to bring in with respect to your CIBIL Score, so that your car loan gets approved without any difficulty.
Things to Be Done before Applying for a Car Loan
- One of the most important things that should be done before you apply for a car loan is to add all the credit information that can affect your CIBIL score in a positive way. This will improve your CIBIL Score.
- You need to do a proper research about the interest rates that you would be charged by different banks for a car loan. This will help you in selecting the best option that is suitable for you.
Quickly Get Car Loan Through Creditseva
Creditseva will help you in getting clarity about the factors that would increase or decrease your CIBIL Score and also provide you with the expert guidance of improving your CIBIL Score so that your car loan application does not get rejected.
Ways to Get a Car Loan with A Low CIBIL Score
- Good Annual Income: When you have a low CIBIL Score, it is difficult to get your car loan approved. In such a scenario, if your annual income is high, it becomes easy for you to get a car loan.
- Down Payment: If an individual is able to make a down payment for at least 20% of the actual car price. This will create a good impression of yours in view of the lender.
- Credit Score: Credit Score is inversely proportional to interest rates. If your credit score reduces below the basic acceptable score, then you need to be ready for paying higher interest for the loan.
- History of Employment: If you have a good employment history, you will be given a car loan easily even if you have a low credit score.
- Proportion of Debt-to-Income: You should have a good proportion of debt and income. If you have an appropriate ratio of debt and income, you will get a car loan easily.
- Reputed Career History: If you an individual who has worked in reputed careers like military etc. then the lender will have a good impression of yours and you will be able to get a car loan without much difficulty.
- Exquisite Record of Education: If you are an individual who has maintained a good track record of education during the higher studies then the chances of your car loan application to be approved are more.
- Good References for The Bank: If you refer 6-8 persons who are well known and established in their field of work, then your car loan will get approved easily and you will become a borrower who is trustworthy from the bank’s point of view.
Impact of Low Credit Score on a Car Loan
It has been observed that there is no particular CIBIL Score for a car loan to be approved, but the criteria for a car loan not to get rejected is to have a good CIBIL Score. If an individual has a CIBIL Score above 750, it is sure that their loan application is not rejected. If an individual has a CIBIL Score way below than 750, like 550 or 600, then that individual does get a loan but the interest rate that is charged on the loan is high. Since car loans are provided against collateral, the lenders do not find much risk involved in car loans.
Steps for Surely Getting a Car Loan
- The best option to keep a check on the credit score is to check it online on a frequent basis. This will enhance the chances of improving your credit score so that your car loan does not get rejected.
- Once you come to know that your car loan may get rejected, you need to keep monitoring your credit score regularly. If in this process, you observe that your car loan might get rejected because your CIBIL Score is low, then you need to rebuild your score.
- You can rebuild your score by making all your payments on time and use your credit cards in a calculated manner.
The Bottom Line
If it is not urgent for you to buy a car, then the best option that you should consider is to save money for some months and then buy it. By doing this, you will not have to pay a down payment for the car and this will in turn help in enhancing your CIBIL score. If you have a good CIBIL Score, you will be charged lesser interest on your car loan.
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